Company Expects Non-GAAP Net Income Per Diluted Share of $2.00 to
$2.25 for Fiscal Year 2013

May 22, 2012 04:05 PM Eastern Daylight Time

NEW YORK--(BUSINESS WIRE)--Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported
financial results for the fourth quarter and fiscal year ended March 31,
2012, which were in line with its most recent financial outlook. In
addition, the Company provided its financial outlook for the first
quarter and fiscal year 2013.

Fiscal Year 2012

For the fiscal year ended March 31, 2012, net revenue was $825.8
million, as compared to $1,136.9 million for the fiscal year ended March
31, 2011, which had benefited from the release of Red Dead Redemption.
GAAP loss from continuing operations was $107.7 million, or $1.30 per
diluted share, as compared to GAAP income from continuing operations of
$53.8 million, or $0.62 per diluted share, for the prior fiscal year.
Non-GAAP net loss was $59.4 million, or $0.71 per diluted share, as
compared to Non-GAAP net income of $94.3 million, or $1.02 per diluted
share, for the prior fiscal year.

For the fourth quarter ended March 31, 2012, net revenue was $148.1
million, as compared to $182.3 million for the fourth quarter ended
March 31, 2011, which had benefited from the post-launch performance of Red
Dead Redemption. GAAP loss from continuing operations was $66.0
million, or $0.78 per diluted share, as compared to $22.4 million, or
$0.27 per diluted share, for the year-ago period. Non-GAAP net loss was
$50.9 million, or $0.60 per diluted share, as compared to $14.4 million,
or $0.18 per diluted share, for the year-ago period.

The strongest contributors to net revenue in the fourth quarter were new
titles including NBA 2K12, Major League Baseball 2K12 and The
Darkness II; and catalog sales led by the Grand Theft Auto franchise
and Red Dead Redemption. Digitally delivered content accounted
for 19% of net revenue, as compared to 15% in fiscal fourth quarter
2011, driven by offerings for the Grand Theft Auto franchise, the Sid
Meier’s Civilization franchise, Red Dead Redemption, Borderlands,
NBA 2K12 and L.A. Noire.

Management Comments

“Fiscal 2012 was a year of creative, operational and strategic
achievement by our Company,” said Strauss Zelnick, Chairman and CEO of
Take-Two. “We delivered groundbreaking titles, including L.A. Noire
and NBA 2K12, which set new standards for excellence; grew our
revenue from digitally delivered content and mobile offerings; made
substantial progress on our online gaming initiatives; and bolstered our
already strong liquidity through a convertible notes offering. While our
financial results were disappointing, the decisions we made position
Take-Two for growth and profitability both this year and over the
long-term.

“Fiscal 2013 kicked off with the successful launch of Max Payne 3,
which received outstanding reviews and promises to be another hit for
Rockstar Games. We have a fantastic lineup of upcoming releases for the
balance of the year and the strongest development pipeline in the
Company’s history.”

Business and Product Highlights

Since January 1, 2012:

Rockstar Games:

Launched Max Payne 3 on May 15 in North America and May 18
internationally on Xbox 360 and PS3. The title received excellent
reviews and sold-in approximately 3 million units during its initial
launch. Max Payne 3 will also be available for the PC on June 1.

Announced a comprehensive downloadable content plan for Max Payne 3,
with new releases starting in June and extending through the fall.
Consumers can preorder all of this upcoming content at a discount by
purchasing the Max Payne 3 Rockstar Pass.

Released a major update to its Rockstar Games Social Club community
service delivering enhanced social and connected gameplay features to
its nearly 15 million members.

Released Max Payne Mobile on April 12, enabling fans to
experience the classic 2001 release, Max Payne, optimized for
the iPad, iPhone and iPod touch.

Released a touch-enabled version of L.A. Noire for the OnLive
platform.

2K:

2K Sports released Major League Baseball 2K12 on March 6,
featuring Cy Young Award winning pitcher Justin Verlander of the
Detroit Tigers as the cover athlete and, for the third year in a row,
executed the MLB 2K Perfect Game Challenge, which is airing on Spike
TV on May 24.

2K Play released Nicktoons MLB 3D on March 6, the first
baseball game designed exclusively for the Nintendo 3DS.

2K Games launched The Darkness II on February 7 in North
America and February 10 internationally. The title received favorable
reviews, including an average Metacritic score of 80 on Xbox 360.

2K Sports released the NBA 2K12: Game of the Year Edition on
March 11, which includes the full retail version of NBA 2K12
along with the previously released Legend’s Showcase add-on
content and a commemorative poster. NBA 2K12 is the highest
rated title in the history of 2K Sports with an average Metacritic
score of 90 on Xbox 360 and PS3. Despite the NBA lockout, the title
sold-in over 5 million units for the second year in a row.

2K Games announced that XCOM: Enemy Unknown, which is in
development at Firaxis Games and will feature both deep strategy and
intense action, is planned for release on October 9, 2012 in North
America and October 12, 2012 internationally.

2K Games announced that BioShock Infinite is now planned for
launch on February 26, 2013. Developed by Irrational Games – the
original creator of the BioShock franchise which has sold-in
over 9.5 million units to date – BioShock Infinite won more
than 75 editorial awards at E3 in 2011, including the Game Critics
Awards’ Best of Show.

2K Games announced that Borderlands 2, the sequel to the hit
shooter-looter that has sold in nearly 6 million units to date, is
expected to launch on September 18, 2012 in North America and
September 21, 2012 internationally.

2K Games announced that Spec Ops: The Line, a heart-pounding
military shooter that explores the dark realities of war, will launch
on June 26, 2012 in North America and June 29, 2012 internationally. A
playable demo is available now on the Xbox LIVE online entertainment
network and the PlayStation Network.

2K Games announced that Sid Meier’s Civilization V: Gods & Kings,
the expansion pack for the award-winning PC strategy title, Civilization
V, will be released on June 19, 2012 in North America and June 22,
2012 internationally.

2K Games now expects to release XCOM, its shooter version of
the franchise that is in development at 2K Marin, during fiscal year
2014.

Financial Outlook for Fiscal 2013

Take-Two is providing its financial outlook for the first quarter ending
June 30, 2012 and fiscal year ending March 31, 2013 as follows:

First Quarter

Ending 6/30/2012

Fiscal Year

Ending 3/31/2013

Net Revenue

$225 to $275 Million

$1.75 to $1.85 Billion

Non-GAAP net income (loss) per diluted share (1)

($0.75) to ($0.60)

$2.00 to $2.25

Stock-based compensation expense per share (2)

$0.17

$0.50

Non-cash amortization of discount on convertible notes per
share

$0.05

$0.16

Non-cash tax expense per share

$0.01

$0.01

1)

The Company’s Non-GAAP net income (loss) per diluted share outlook
includes the negative impact from an expected one-time payment in
June of $15 million, or $0.18 per diluted share for the first
quarter ending June 30, 2012 and $0.13 per diluted share for the
fiscal year ending March 31, 2013.

2)

The Company's stock-based compensation expense for the periods
above includes the cost of approximately 3.7 million shares issued
to ZelnickMedia that are subject to variable accounting. Actual
expense to be recorded in connection with these shares is
dependent upon several factors, including future changes in
Take-Two's stock price.

Key assumptions and dependencies underlying the Company’s financial
outlook include continued consumer acceptance of current generation
video game and computer entertainment systems; the ability to develop
and publish products that capture market share for these systems; the
timely delivery of the titles included in this financial outlook; and
stable foreign exchange rates. See also “Cautionary Note Regarding
Forward Looking Statements” below.

Product Releases

The following titles were released since January 1, 2012:

Label

Title

Platforms

Release Date

2K Games

The Darkness II

Xbox 360, PS3, PC

February 7, 2012*

2K Sports

Major League Baseball 2K12

Xbox 360, PS3, PS2, Wii, PSP, DS, PC

March 6, 2012

2K Sports

MLB 2K12 / NBA 2K12 Combo Pack

Xbox 360

March 6, 2012

2K Play

Nicktoons MLB

3DS

March 6, 2012

2K Sports

NBA 2K12: Game of the Year Edition

Xbox 360, PS3

March 11, 2012

Rockstar Games

Max Payne Mobile

iOS

April 12, 2012

2K Games

Sid Meier’s Pirates!

iPhone

April 19, 2012

Rockstar Games

Max Payne 3

Xbox 360, PS3

May 15, 2012*

*North American release date; international release date
typically follows three days after.

Take-Two's lineup of future titles announced to date includes:

Label

Title

Platforms

Planned Release

Rockstar Games

Max Payne 3

PC

June 1, 2012

2K Games

Sid Meier’s Civilization V: Gods and Kings (Expansion Pack)

PC

June 19, 2012*

2K Games

Spec Ops: The Line

Xbox 360, PS3, PC

June 26, 2012*

Rockstar Games

Max Payne Mobile

Android

June 2012

Rockstar Games

Max Payne 3: Local Justice Map Pack (DLC)

Xbox 360, PS3, PC

June 2012

Rockstar Games

Max Payne 3: Disorganized Crime Map Pack (DLC)

Xbox 360, PS3, PC

Summer 2012

Rockstar Games

Max Payne 3: Deathmatch Made In Heaven Mode Pack (DLC)

Xbox 360, PS3, PC

Summer 2012

Rockstar Games

Max Payne 3: Hostage Negotiation Map Pack (DLC)

Xbox 360, PS3, PC

Summer 2012

Rockstar Games

Max Payne 3: New York Minute Co-Op Pack (DLC)

Xbox 360, PS3, PC

Summer 2012

2K Games

Borderlands 2

Xbox 360, PS3, PC

September 18, 2012*

2K Sports

NBA 2K13

Xbox 360, PS3, Wii, PSP, PC

October 2, 2012

2K Games

XCOM: Enemy Unknown

Xbox 360, PS3, PC

October 9, 2012*

Rockstar Games

Max Payne 3: Painful Memories Map Pack (DLC)

Xbox 360, PS3, PC

Fall 2012

Rockstar Games

Max Payne 3: Trickle Down Economics Map Pack (DLC)

Xbox 360, PS3, PC

Fall 2012

2K Games

BioShock Infinite

Xbox 360, PS3, PC

February 26, 2013

Rockstar Games

Grand Theft Auto V

TBA

TBA

2K Games

XCOM

Xbox 360, PS3, PC

Fiscal Year 2014

*North American release date; international release typically
follows three days after.

Conference Call

Take-Two will host a conference call today at 4:30 p.m. Eastern Time to
review these results and discuss other topics. The call can be accessed
by dialing (877) 407-0984 or (201) 689-8577. A live listen-only webcast
of the call will be available by visiting http://ir.take2games.com
and a replay will be available following the call at the same location.

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with U.S.
generally accepted accounting principles (GAAP), the Company uses
Non-GAAP measures of financial performance that exclude certain
non-recurring or non-cash items. Non-GAAP gross profit, income (loss)
from operations, net income (loss), and earnings (loss) per share are
measures that exclude certain non-recurring or non-cash items and should
be considered in addition to results prepared in accordance with GAAP.
They are not intended to be considered in isolation from, as a
substitute for, or superior to, GAAP results. These Non-GAAP financial
measures may be different from similarly titled measures used by other
companies.

The Company believes that these Non-GAAP financial measures, when taken
into consideration with the corresponding GAAP financial measures, are
important in gaining an understanding of the Company’s ongoing business.
These Non-GAAP financial measures also provide for comparative results
from period to period. Therefore, the Company believes it is appropriate
to exclude certain items as follows:

Stock-based compensation – the Company does not consider
stock-based compensation charges when evaluating business performance
and management does not contemplate stock-based compensation expense
in its short- and long-term operating plans. As a result, the Company
has excluded such expenses from its Non-GAAP financial measures.

Business reorganization, restructuring and related expenses –
the Company does not engage in reorganization activities on a regular
basis and therefore believes it is appropriate to exclude business
reorganization, restructuring and related expenses from its Non-GAAP
financial measures.

Income (loss) from discontinued operations – the Company does
not engage in sales of subsidiaries on a regular basis and therefore
believes it is appropriate to exclude such gains (losses) from its
Non-GAAP financial measures. As the Company is no longer active in its
discontinued operations, it believes it is appropriate to exclude
income (losses) thereon from its Non-GAAP financial measures.

Professional fees and expenses associated with unusual legal and
other matters – the Company has incurred expenses for professional
fees and has accrued for legal settlements that are outside its
ordinary course of business. As a result, the Company has excluded
such expenses from its Non-GAAP financial measures.

Non-cash amortization of discount on convertible notes – The
Company records non-cash amortization of discount on convertible notes
as interest expense in addition to the interest expense already
recorded for coupon payments. The Company excludes the non-cash
portion of the interest expense from its Non-GAAP financial measures
because these amounts are unrelated to its ongoing business operations.

Non-cash tax expense for the impact of deferred tax liabilities
associated with tax deductible amortization of goodwill – due to
the nature of the adjustment as well as the expectation that it will
not have any cash impact in the foreseeable future, the Company
believes it is appropriate to exclude this expense from its Non-GAAP
financial measures.

About Take-Two Interactive Software

Headquartered in New York City, Take-Two Interactive Software, Inc. is a
leading developer, marketer and publisher of interactive entertainment
for consumers around the globe. The Company develops and publishes
products through its two wholly-owned labels Rockstar Games and 2K,
which publishes its titles under the 2K Games, 2K Sports and 2K Play
brands. Our products are designed for console systems, handheld gaming
systems and personal computers, including smartphones and tablets, and
are delivered through physical retail, digital download, online
platforms and cloud streaming services. The Company’s common stock is
publicly traded on NASDAQ under the symbol TTWO. For more corporate and
product information please visit our website at http://www.take2games.com.

All trademarks and copyrights contained herein are the property of their
respective holders.

Cautionary Note Regarding Forward-Looking Statements

The statements contained herein which are not historical facts are
considered forward-looking statements under federal securities laws and
may be identified by words such as "anticipates," "believes,"
"estimates," "expects," "intends," "plans," "potential," "predicts,"
"projects," "seeks," "will," or words of similar meaning and include,
but are not limited to, statements regarding the outlook for the
Company's future business and financial performance. Such
forward-looking statements are based on the current beliefs of our
management as well as assumptions made by and information currently
available to them, which are subject to inherent uncertainties, risks
and changes in circumstances that are difficult to predict. Actual
outcomes and results may vary materially from these forward-looking
statements based on a variety of risks and uncertainties including: our
dependence on key management and product development personnel, our
dependence on our Grand Theft Auto products and our ability to develop
other hit titles for current generation platforms, the timely release
and significant market acceptance of our games, the ability to maintain
acceptable pricing levels on our games, our ability to raise capital if
needed and risks associated with international operations. Other
important factors and information are contained in the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 2011, in the
section entitled "Risk Factors," and the Company's other periodic
filings with the SEC, which can be accessed at www.take2games.com.
All forward-looking statements are qualified by these cautionary
statements and speak only as of the date they are made. The Company
undertakes no obligation to update any forward-looking statement,
whether as a result of new information, future events or otherwise.

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

Three months ended March 31,

Twelve months ended March 31,

2012

2011

2012

2011

Net revenue

$

148,084

$

182,255

$

825,823

$

1,136,876

Cost of goods sold:

Product costs

47,845

60,766

255,236

326,936

Software development costs and royalties

35,401

23,491

164,487

172,397

Internal royalties

1,158

9,766

34,156

115,032

Licenses

32,062

26,020

74,976

75,016

Total cost of goods sold

116,466

120,043

528,855

689,381

Gross profit

31,618

62,212

296,968

447,495

Selling and marketing

40,065

32,026

183,749

176,294

General and administrative

35,133

29,170

121,200

109,484

Research and development

14,822

17,248

64,162

69,576

Depreciation and amortization

2,740

3,728

12,123

14,999

Total operating expenses

92,760

82,172

381,234

370,353

Income (loss) from operations

(61,142

)

(19,960

)

(84,266

)

77,142

Interest and other, net

(5,368

)

(3,124

)

(19,571

)

(13,519

)

Income (loss) from continuing operations before income taxes

(66,510

)

(23,084

)

(103,837

)

63,623

(Benefit) provision for income taxes

(505

)

(668

)

3,863

9,819

Income (loss) from continuing operations

(66,005

)

(22,416

)

(107,700

)

53,804

Income (loss) from discontinued operations, net of taxes

(831

)

362

(1,116

)

(5,346

)

Net income (loss)

$

(66,836

)

$

(22,054

)

$

(108,816

)

$

48,458

Earnings (loss) per share:

Continuing operations

$

(0.78

)

$

(0.27

)

$

(1.30

)

$

0.62

Discontinued operations

(0.01

)

-

(0.01

)

(0.06

)

Basic earnings (loss) per share

$

(0.79

)

$

(0.27

)

$

(1.31

)

$

0.56

Continuing operations

$

(0.78

)

$

(0.27

)

$

(1.30

)

$

0.62

Discontinued operations

(0.01

)

-

(0.01

)

(0.06

)

Diluted earnings (loss) per share

$

(0.79

)

$

(0.27

)

$

(1.31

)

$

0.56

Weighted average shares outstanding: (1)

Basic

84,415

81,960

83,356

86,127

Diluted

84,415

81,960

83,356

86,139

(1) Basic and diluted include participating shares of
5,615 for the twelve months ended March 31, 2011.

Three months ended March 31,

Twelve months ended March 31,

OTHER INFORMATION

2012

2011

2012

2011

Geographic revenue mix

United States

64

%

66

%

54

%

55

%

International

36

%

34

%

46

%

45

%

Platform revenue mix

Microsoft Xbox 360

50

%

45

%

45

%

40

%

Sony PlayStation 3

28

%

32

%

36

%

39

%

PC and other

12

%

8

%

11

%

10

%

Sony PSP

3

%

3

%

2

%

2

%

Nintendo Wii

3

%

7

%

2

%

5

%

Nintendo DS

2

%

3

%

2

%

3

%

Sony PlayStation 2

2

%

2

%

2

%

1

%

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

March 31,

March 31,

2012

2011

ASSETS

Current assets:

Cash and cash equivalents

$

420,279

$

280,359

Accounts receivable, net of allowances of $51,002 and $42,900 at
March 31, 2012

Amortization and impairment of software development costs and
licenses

150,700

143,811

Depreciation and amortization

12,123

14,999

Loss from discontinued operations

1,116

5,346

Amortization and impairment of intellectual property

983

3,927

Stock-based compensation

33,494

28,765

Gain on sale of intellectual property

(2,200

)

-

Deferred income taxes

1,878

(1,095

)

Amortization of discount on Convertible Notes

11,728

7,374

Amortization of debt issuance costs

1,527

1,251

Other, net

1,231

(1,097

)

Changes in assets and liabilities, net of effect from purchases of
businesses:

Accounts receivable

39,182

(10,082

)

Inventory

2,101

(99

)

Software development costs and licenses

(191,223

)

(156,782

)

Prepaid expenses, other current and other non-current assets

2,537

16,943

Deferred revenue

430

1,490

Accounts payable, accrued expenses, income taxes payable and other
liabilities

(39,748

)

41,217

Net cash used in discontinued operations

(2,007

)

(9,628

)

Net cash (used in) provided by operating activities

(84,964

)

134,798

Investing activities:

Purchase of fixed assets

(10,786

)

(9,653

)

Settlement of purchase price related to discontinued operations

(1,475

)

-

Cash received from sale of intellectual property

2,200

-

Cash received from sale of business

-

3,075

Payments in connection with business combinations, net of cash
acquired

(4,101

)

(1,000

)

Net cash used in investing activities

(14,162

)

(7,578

)

Financing activities:

Proceeds from exercise of employee stock options

239

734

Proceeds from issuance of Convertible Notes

250,000

-

Payment of debt issuance costs

(6,875

)

-

Net cash provided by financing activities

243,364

734

Effects of foreign exchange rates on cash and cash equivalents

(4,318

)

6,567

Net increase in cash and cash equivalents

139,920

134,521

Cash and cash equivalents, beginning of year

280,359

145,838

Cash and cash equivalents, end of period

$

420,279

$

280,359

TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES

RECONCILIATION OF GAAP TO Non-GAAP MEASURES (Unaudited)

(in thousands, except per share amounts)

Three months ended March 31,

Twelve months ended March 31,

2012

2011

2012

2011

Gross Profit

GAAP Gross Profit

$

31,618

$

62,212

$

296,968

$

447,495

Stock-based compensation

765

894

5,144

10,695

Non-GAAP Gross Profit

$

32,383

$

63,106

$

302,112

$

458,190

Income (Loss) from Operations

GAAP Income (Loss) from Operations

$

(61,142

)

$

(19,960

)

$

(84,266

)

$

77,142

Stock-based compensation

10,031

5,135

33,494

28,765

Business reorganization and related

-

-

1,015

1,713

Professional fees and legal matters

-

455

196

826

Non-GAAP Income (Loss) from Operations

$

(51,111

)

$

(14,370

)

$

(49,561

)

$

108,446

Net Income (Loss)

GAAP Net Income (Loss)

$

(66,836

)

$

(22,054

)

$

(108,816

)

$

48,458

Discontinued operations

831

(362

)

1,116

5,346

Stock-based compensation

10,031

5,135

33,494

28,765

Professional fees and legal matters

-

455

196

826

Business reorganization and related

-

-

1,015

1,713

Non-cash amortization of discount on Convertible Notes

4,434

1,934

11,728

7,374

Non-cash tax expense

603

473

1,889

1,866

Non-GAAP Net Income (Loss)

$

(50,937

)

$

(14,419

)

$

(59,378

)

$

94,348

Diluted Earnings (Loss) Per Share

GAAP earnings (loss) per share

$

(0.79

)

$

(0.27

)

$

(1.31

)

$

0.56

Non-GAAP earnings (loss) per share (1)

$

(0.60

)

$

(0.18

)

$

(0.71

)

$

1.02

Number of diluted shares used in computation

GAAP

84,415

81,960

83,356

86,139

Non-GAAP (2)

84,415

81,960

83,356

99,066

(1)

For the twelve months ended March 31, 2011, Non-GAAP diluted
EPS has been calculated using the “if-converted” method as a
result of the 4.375% Convertible Senior Notes issued in June 2009
("4.375% Convertible Notes"), for which diluted net income has
been adjusted by $6,686 related to interest and debt issuance
costs, net of tax. The shares used for computing the twelve months
ended March 31, 2011 Non-GAAP diluted EPS includes 12,927 shares
related to the potential dilution from the 4.375% Convertible
Notes.

The “if-converted” method was not used for the other periods
presented as the assumed conversion would have been anti-dilutive.

(2)

For the twelve months ended March 31, 2011, the diluted shares
used in the computation of Non-GAAP diluted EPS include
participating shares of 5,615.